BTL as a pension fund - why not?
Discussion
anonymous said:
[redacted]
This is the point. Land and property has turned into a massive wealth store for a vast amount of the population. It has been bought up and retained by private individuals. These individuals eventually die and pass on the wealth store to their family. The family often retains the wealth in the form of more property/the same property/move to a big property.Yet we wonder why we have so much house price inflation?? Its fairly simple, its finite and we have never had so much owner and retained by private individuals and families. The sad thing is it makes it progressively harder to purchase your first property without help from your family/inheritance etc.
RichB said:
gibbon said:
... These individuals eventually die and pass on the wealth store to their family. The family often retains the wealth...
correction, they retain 60% of the wealth, the country inherits 40% via the death duty. 
Queue attacks from the left!
heppers75 said:
well there you go... I was once one of those people on that low wage, living in a crappy house with the 40 mile each way commute. It was hard f**king work but you do what you can and get on with it. You draw down a mortgage in said crappy house for a few years and as your wages grow you increase your equity. Rather than living in a slightly better place but paying rent you make the sensible choice and live in pretty much a s
t hole but you improve it as much as it practical. You can then sell that and move onwards to the next house, you do that again and then maybe again over say ten years and you know what you are in what is pretty much an "average" house. Then after that life takes you where it takes you, if you do well you carry onwards and upwards if you hold still then you have your average house etc etc. Just out of interest how is the taxpayer subsidising private landlords right now and what sort of entitlement do these private landlords have in your eyes?
As for how it might affect me, maybe, maybe not - I am geared well below 50% and despite many peoples advice to go higher I won't - mostly because I am genuinely concerned that the envy driven barn pots might actually succeed in coming up with something equally inventively destructive as it is stupid!
Edited by heppers75 on Monday 1st December 22:23
WRT 'you' - These are not my circumstances.
economicpygmy said:
heppers75 said:
well there you go... I was once one of those people on that low wage, living in a crappy house with the 40 mile each way commute. It was hard f**king work but you do what you can and get on with it. You draw down a mortgage in said crappy house for a few years and as your wages grow you increase your equity. Rather than living in a slightly better place but paying rent you make the sensible choice and live in pretty much a st hole but you improve it as much as it practical. You can then sell that and move onwards to the next house, you do that again and then maybe again over say ten years and you know what you are in what is pretty much an "average" house. Then after that life takes you where it takes you, if you do well you carry onwards and upwards if you hold still then you have your average house etc etc. Just out of interest how is the taxpayer subsidising private landlords right now and what sort of entitlement do these private landlords have in your eyes?
As for how it might affect me, maybe, maybe not - I am geared well below 50% and despite many peoples advice to go higher I won't - mostly because I am genuinely concerned that the envy driven barn pots might actually succeed in coming up with something equally inventively destructive as it is stupid!
Edited by heppers75 on Monday 1st December 22:23
WRT 'you' - These are not my circumstances.
How does wage inflation need to save the day? There are 1000's of properties within reach of average earners you can ignore my previous posts if you like but the property for sale today and the sold house prices around the UK as registered with the land registry completely support this. Do you either not believe or understand this or are you simply ignoring it?
Buy a house in your 20's or 30's chance are it will be crap, work your way up the ladder and it will improve (if you are capable of earning more) and then you will get there - IF you work for it. Not everyone will get there, no matter how hard they work and they will live their whole lives in the same type of house as the first one they bought, that is just how life works.
As it happens and as an aside I spoke to my dad about an hour ago... I mentioned the house they bought first earlier in the thread - That house he bought he paid £8.4k for, he was on £2.8k a year at the time. That same house would sell today for £50k ish, so all things being equal it is probably about much of a muchness and that was 37 years ago!
Something I don't see mentioned often is the desire for period properties.
A couple of generations ago, a Victorian terrace was just an old house that nobody would pay much for.
Now, things are a little different.
When I were a lad, it was 30s stuff that was getting bulldozed. Good examples then got cherished. The cycle will continue - great 60s builds are starting to be appreciated.
There will always be an element to prices that reflects that - Georgian and Victorian will climb simply because they are a diminishing commodity.
When you look at a lot of large prosperous towns, their stock is often mainly period - it is basically antique and will attract pricing the same as furniture or classic cars or art - finite supply, continuing demand.
As much as anything else, that's why the London market won't 'correct' long term - if you want a Georgian in Knightsbridge, you can only buy one that's already there. New builds and their pricing won't count.
A couple of generations ago, a Victorian terrace was just an old house that nobody would pay much for.
Now, things are a little different.
When I were a lad, it was 30s stuff that was getting bulldozed. Good examples then got cherished. The cycle will continue - great 60s builds are starting to be appreciated.
There will always be an element to prices that reflects that - Georgian and Victorian will climb simply because they are a diminishing commodity.
When you look at a lot of large prosperous towns, their stock is often mainly period - it is basically antique and will attract pricing the same as furniture or classic cars or art - finite supply, continuing demand.
As much as anything else, that's why the London market won't 'correct' long term - if you want a Georgian in Knightsbridge, you can only buy one that's already there. New builds and their pricing won't count.
economicpygmy said:
^ ... and we have never had so much credit availability ...
Because that is the only solution, cause or effect, the result is the same.Larger cheaper debt, broadly same monthly costs, mortgages get longer, even intergenerational as they are in some other countries already.
Justayellowbadge said:
Something I don't see mentioned often is the desire for period properties.
A couple of generations ago, a Victorian terrace was just an old house that nobody would pay much for.
Now, things are a little different.
When I were a lad, it was 30s stuff that was getting bulldozed. Good examples then got cherished. The cycle will continue - great 60s builds are starting to be appreciated.
There will always be an element to prices that reflects that - Georgian and Victorian will climb simply because they are a diminishing commodity.
When you look at a lot of large prosperous towns, their stock is often mainly period - it is basically antique and will attract pricing the same as furniture or classic cars or art - finite supply, continuing demand.
As much as anything else, that's why the London market won't 'correct' long term - if you want a Georgian in Knightsbridge, you can only buy one that's already there. New builds and their pricing won't count.
As this is pistonheads we have to draw the comparison the classic cars, a london georgian terrace I guess can be compared to a pre '73 911, and just look whats happened to them in the last 5 or 6 years.A couple of generations ago, a Victorian terrace was just an old house that nobody would pay much for.
Now, things are a little different.
When I were a lad, it was 30s stuff that was getting bulldozed. Good examples then got cherished. The cycle will continue - great 60s builds are starting to be appreciated.
There will always be an element to prices that reflects that - Georgian and Victorian will climb simply because they are a diminishing commodity.
When you look at a lot of large prosperous towns, their stock is often mainly period - it is basically antique and will attract pricing the same as furniture or classic cars or art - finite supply, continuing demand.
As much as anything else, that's why the London market won't 'correct' long term - if you want a Georgian in Knightsbridge, you can only buy one that's already there. New builds and their pricing won't count.
I guess you could even draw the comparison further and compare said pre '73 911s with the now also rocketing in price back dates and homages, similar to pastiche property and new build flats.
Where would you want to put your money though? Come a correction it will be the back dates and replicas that crash, I dont believe a good early 911s will ever be in normal (even moderately well healed) enthusiast price realms again, and neither will Georgian london property.
Edited by gibbon on Monday 1st December 23:57
Justayellowbadge said:
Something I don't see mentioned often is the desire for period properties.
A couple of generations ago, a Victorian terrace was just an old house that nobody would pay much for.
Now, things are a little different.
When I were a lad, it was 30s stuff that was getting bulldozed. Good examples then got cherished. The cycle will continue - great 60s builds are starting to be appreciated.
There will always be an element to prices that reflects that - Georgian and Victorian will climb simply because they are a diminishing commodity.
When you look at a lot of large prosperous towns, their stock is often mainly period - it is basically antique and will attract pricing the same as furniture or classic cars or art - finite supply, continuing demand.
As much as anything else, that's why the London market won't 'correct' long term - if you want a Georgian in Knightsbridge, you can only buy one that's already there. New builds and their pricing won't count.
It depends upon the economics of the location.A couple of generations ago, a Victorian terrace was just an old house that nobody would pay much for.
Now, things are a little different.
When I were a lad, it was 30s stuff that was getting bulldozed. Good examples then got cherished. The cycle will continue - great 60s builds are starting to be appreciated.
There will always be an element to prices that reflects that - Georgian and Victorian will climb simply because they are a diminishing commodity.
When you look at a lot of large prosperous towns, their stock is often mainly period - it is basically antique and will attract pricing the same as furniture or classic cars or art - finite supply, continuing demand.
As much as anything else, that's why the London market won't 'correct' long term - if you want a Georgian in Knightsbridge, you can only buy one that's already there. New builds and their pricing won't count.
There are northern cities stuffed with lovely Victorian properties that sell for pennies, they therefore house people on low incomes or housing benefit and there seems little prospect of gentrification.
gibbon said:
This is the point. Land and property has turned into a massive wealth store for a vast amount of the population. It has been bought up and retained by private individuals. These individuals eventually die and pass on the wealth store to their family. The family often retains the wealth in the form of more property/the same property/move to a big property.
Yet we wonder why we have so much house price inflation?? Its fairly simple, its finite and we have never had so much owner and retained by private individuals and families. The sad thing is it makes it progressively harder to purchase your first property without help from your family/inheritance etc.
Two posts above this one you said you do not think we have a housing problem just an aspirational attitude problemYet we wonder why we have so much house price inflation?? Its fairly simple, its finite and we have never had so much owner and retained by private individuals and families. The sad thing is it makes it progressively harder to purchase your first property without help from your family/inheritance etc.
Edited by menousername on Tuesday 2nd December 08:46
heppers75 said:
well there you go... I was once one of those people on that low wage, living in a crappy house with the 40 mile each way commute. It was hard f**king work but you do what you can and get on with it. You draw down a mortgage in said crappy house for a few years and as your wages grow you increase your equity. Rather than living in a slightly better place but paying rent you make the sensible choice and live in pretty much a st hole but you improve it as much as it practical. You can then sell that and move onwards to the next house, you do that again and then maybe again over say ten years and you know what you are in what is pretty much an "average" house. Then after that life takes you where it takes you, if you do well you carry onwards and upwards if you hold still then you have your average house etc entitlement do these privaI am genuinely concerned that the envy driven barn pots might actually succeed in coming up with something equally inventively destructive as it is stupid!
Edited by heppers75 on Monday 1st December 22:23
Your subjective opinion is that there are plenty of properties available in relevant areas at good prices and the problem is a sense of entitlemt. However the cold hard facts also referenced by you yourself is that these 1000s of properties aren't selling. There is undoubtedly a reason why.
In what was a crazy 18 months in the housing market why have they not sold even as holiday homes? Clearly something is amiss with this prices, credit, local economy etc etc.
Further....you yourself admit you were and are one of those aspirational types who started low and flipped up to bigger houses....so what are we saying...only you are allowed to be aspirational nobody else?
Perhaps the price growth is coming to an end or at least stagnating having become close to unsustainable, and prospective buyers, even if they can afford those properties in those areas, are rightly holding off as they see looming interest rate rises, inflated asking prices and small to zero future growth. They doubt their ability to move upward, they are sceptical about the state of the economy and future emoyment plus the rising costs of commuting.
In another thread we would be bashing the people who DID buy
With respect
Edited by menousername on Tuesday 2nd December 08:50
heppers75 said:
economicpygmy said:
heppers75 said:
well there you go... I was once one of those people on that low wage, living in a crappy house with the 40 mile each way commute. It was hard f**king work but you do what you can and get on with it. You draw down a mortgage in said crappy house for a few years and as your wages grow you increase your equity. Rather than living in a slightly better place but paying rent you make the sensible choice and live in pretty much a st hole but you improve it as much as it practical. You can then sell that and move onwards to the next house, you do that again and then maybe again over say ten years and you know what you are in what is pretty much an "average" house. Then after that life takes you where it takes you, if you do well you carry onwards and upwards if you hold still then you have your average house etc etc. Just out of interest how is the taxpayer subsidising private landlords right now and what sort of entitlement do these private landlords have in your eyes?
As for how it might affect me, maybe, maybe not - I am geared well below 50% and despite many peoples advice to go higher I won't - mostly because I am genuinely concerned that the envy driven barn pots might actually succeed in coming up with something equally inventively destructive as it is stupid!
Edited by heppers75 on Monday 1st December 22:23
WRT 'you' - These are not my circumstances.
How does wage inflation need to save the day? There are 1000's of properties within reach of average earners you can ignore my previous posts if you like but the property for sale today and the sold house prices around the UK as registered with the land registry completely support this. Do you either not believe or understand this or are you simply ignoring it?
Buy a house in your 20's or 30's chance are it will be crap, work your way up the ladder and it will improve (if you are capable of earning more) and then you will get there - IF you work for it. Not everyone will get there, no matter how hard they work and they will live their whole lives in the same type of house as the first one they bought, that is just how life works.
As it happens and as an aside I spoke to my dad about an hour ago... I mentioned the house they bought first earlier in the thread - That house he bought he paid £8.4k for, he was on £2.8k a year at the time. That same house would sell today for £50k ish, so all things being equal it is probably about much of a muchness and that was 37 years ago!
I'm not ignoring your point regarding houses on rightmove. I said above that it would be interesting to find out the breakdown of property type and cost (and location, employment..etc) but cant justify more than a few minutes to reply atm (work deadlines).
The only way houses grow in value is via inflation (credit supply stoked with demand), wage growth or credit availability (private access to capital). The latter two are on very shaky ground and the former (IMO obviously) could cause all sorts of problems, hence Carneys warnings. Again; Im not suggesting entitlement as mentioned.
Nope your dad might be correct but the trend is otherwise. Look at the figures if you don't believe me; affordability is falling. IIRC Nationwide have figures. So if all this money is to be spent on debt, what about the governments ability to tax? What about the ability to save for old age?
gibbon said:
economicpygmy said:
^ ... and we have never had so much credit availability ...
Because that is the only solution, cause or effect, the result is the same.Larger cheaper debt, broadly same monthly costs, mortgages get longer, even intergenerational as they are in some other countries already.
We'll end up in the hands of the IMF again, only this time there will be no north sea oil.
menousername said:
heppers75 said:
well there you go... I was once one of those people on that low wage, living in a crappy house with the 40 mile each way commute. It was hard f**king work but you do what you can and get on with it. You draw down a mortgage in said crappy house for a few years and as your wages grow you increase your equity. Rather than living in a slightly better place but paying rent you make the sensible choice and live in pretty much a st hole but you improve it as much as it practical. You can then sell that and move onwards to the next house, you do that again and then maybe again over say ten years and you know what you are in what is pretty much an "average" house. Then after that life takes you where it takes you, if you do well you carry onwards and upwards if you hold still then you have your average house etc entitlement do these privaI am genuinely concerned that the envy driven barn pots might actually succeed in coming up with something equally inventively destructive as it is stupid!
Edited by heppers75 on Monday 1st December 22:23
Your subjective opinion is that there are plenty of properties available in relevant areas at good prices and the problem is a sense of entitlemt. However the cold hard facts also referenced by you yourself is that these 1000s of properties aren't selling. There is undoubtedly a reason why.
In what was a crazy 18 months in the housing market why have they not sold even as holiday homes? Clearly something is amiss with this prices, credit, local economy etc etc.
Further....you yourself admit you were and are one of those aspirational types who started low and flipped up to bigger houses....so what are we saying...only you are allowed to be aspirational nobody else?
Perhaps the price growth is coming to an end or at least stagnating having become close to unsustainable, and prospective buyers, even if they can afford those properties in those areas, are rightly holding off as they see looming interest rate rises, inflated asking prices and small to zero future growth. They doubt their ability to move upward, they are sceptical about the state of the economy and future emoyment plus the rising costs of commuting.
In another thread we would be bashing the people who DID buy
With respect
Edited by menousername on Tuesday 2nd December 08:50
No I am not saying that it should only be me, in fact quite the opposite that the country actually needs people to do that so that the housing stock at the lower end of the market continually revolves into new hands for those just getting on the ladder. The entitlement comes from the fact that it would appear nobody wants to start at the bottom these days and feels the need/right to start far higher up than the crappy two up two down mid terrace or one bedroom flat!
I am not sure I am being contradictory, well at least I can't see where!
menousername said:
Further....you yourself admit you were and are one of those aspirational types who started low and flipped up to bigger houses....so what are we saying...only you are allowed to be aspirational nobody else?
What was said was working one's way up, as opposed to just expecting perfection to be within affordable immediate reach."BTL as a pension fund - why not?"
Because sooner or later Russell Brand will show up.
https://www.youtube.com/watch?v=lmlZWYvXMUo
economicpygmy said:
Around 80% of benefits are paid to those in work to subsidise the cost of living, its not just government subsidised tenants. Why is this needed then? It costs billions more in HB.
I'm not ignoring your point regarding houses on rightmove. I said above that it would be interesting to find out the breakdown of property type and cost (and location, employment..etc) but cant justify more than a few minutes to reply atm (work deadlines).
The only way houses grow in value is via inflation (credit supply stoked with demand), wage growth or credit availability (private access to capital). The latter two are on very shaky ground and the former (IMO obviously) could cause all sorts of problems, hence Carneys warnings. Again; Im not suggesting entitlement as mentioned.
Nope your dad might be correct but the trend is otherwise. Look at the figures if you don't believe me; affordability is falling. IIRC Nationwide have figures. So if all this money is to be spent on debt, what about the governments ability to tax? What about the ability to save for old age?
Larger cheaper debt, broadly same monthly costs, mortgages get longer, even intergenerational as they are in some other countries already.I *think* I read in the FT that they are already avaliable in some form
We'll end up in the hands of the IMF again, only this time there will be no north sea oil.
It is needed because people don't/won't live in a truly bottom end house, mortgages are roughly £500 per £100k give or take and depending on the deal you get, so all these people renting at £400 a month could quite easily afford a £75k mortgage. But the problem is the £400 a month in rent gets them into a far nicer house than the £400 a month mortgage would, they would also have to have acted in a responsible manner with their finances to get the £400 a month mortgage - many many do not therefore do not have access to that credit. But there is no real reason why someone frugal enough, sensible enough and responsible enough earning £18k a year should not be able to get on the housing ladder. I know because I know two instances of people that have done just that in recent months, one a single 20 year lad and the other a couple in their early 20's with a 1 year old; if people really want to it is more than possible, there are just too many reasons not to. I'm not ignoring your point regarding houses on rightmove. I said above that it would be interesting to find out the breakdown of property type and cost (and location, employment..etc) but cant justify more than a few minutes to reply atm (work deadlines).
The only way houses grow in value is via inflation (credit supply stoked with demand), wage growth or credit availability (private access to capital). The latter two are on very shaky ground and the former (IMO obviously) could cause all sorts of problems, hence Carneys warnings. Again; Im not suggesting entitlement as mentioned.
Nope your dad might be correct but the trend is otherwise. Look at the figures if you don't believe me; affordability is falling. IIRC Nationwide have figures. So if all this money is to be spent on debt, what about the governments ability to tax? What about the ability to save for old age?
gibbon said:
economicpygmy said:
^ ... and we have never had so much credit availability ...
Because that is the only solution, cause or effect, the result is the same.Larger cheaper debt, broadly same monthly costs, mortgages get longer, even intergenerational as they are in some other countries already.
We'll end up in the hands of the IMF again, only this time there will be no north sea oil.
To my mind this subject can be danced around all day long but the facts really are the facts, there are huge amounts of housing stock which is affordable within 40 miles of pretty much every location in the country, they are not fictitious prices as the Mouseprice and Zoopla lookups on sold prices back up the fact that these properties sell. Those houses are not 'desirable' for the most part and I suspect many of them are purchased by people doing BTL and probably made more desirable then let to those that could not or would not get access to the initial credit to buy it. Also I think we are all pretty much aware of the fact that a vast majority those people in the market for a first home will often make the choice of renting somewhere a bit nicer and a bit more convenient for work or their social circle rather than buy somewhere that is not. Whilst they try and save up for a deposit on somewhere "nicer".
And in the meantime BTL as a pension fund is exactly what I am doing, gearing myself to 50% or less so I have options just in case the envy driven left or moronic right decide they want to take a bigger piece of me than they already do!
Edited by heppers75 on Tuesday 2nd December 10:33
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